InvestorQ : Can you tell me about the PLI incentive package for auto sector and how it will impact stocks like Tata Motors, Maruti and Ashok Leyland?
Sam Eswaran made post

Can you tell me about the PLI incentive package for auto sector and how it will impact stocks like Tata Motors, Maruti and Ashok Leyland?

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Moii Chavate answered.
3 months ago
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One of the most aggressive performance linked incentive (PLI) scheme was cleared by the Union Cabinet on Wednesday for the automobile sector. The PLI package is worth Rs.25,938 crore and the scheme has a very strong green bias. In order to be eligible for the performance-linked incentive (PLI) scheme, four-wheeler companies are required to invest Rs.2,000 crore while two-wheeler companies must invest at least Rs.1,000 crore.

The above investments will be for a minimum period of 5 years. Apart from 4-wheelers and 2-wheelrs, the PLI scheme will also apply to auto component manufacturers wherein the minimum investment limit will be Rs.500 crore. The idea is two-fold. Firstly, this move will largely encourage localization of production sourcing and thus attract foreign investments. Secondly, the incentives are much higher for green initiatives pushing the green agenda too.

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